Falling Apart

How Adults are Faring in the Crisis of Job-Based Health Insurance in California and the United States

In the second half of the twentieth century the American system of health care delivery emerged as a dual system of private, employer-sponsored health care for most people, supplemented by public health care for the poor and elderly. Today, rising health insurance premiums are leading to a marked shift in the nature of health care coverage for the American worker.

This study analyzes health insurance trends for non-elderly adults (19-65 years of age) in the United States and California from 2000 to 2004, and estimates the impact of premium price increases on health insurance coverage over this period. Finally, it simulates future coverage rates for California between the years 2005 to 2010.

The data on health insurance coverage in this brief comes from the March Supplement to the Current Population Survey for 2000 to 2004. This data was augmented with premium price information from the Employer Health Benefit Surveys (2000 to 2004) conducted by the Kaiser Family Foundation and Health Research and Educational Trust.

The report finds that over the last five years there were important shifts for all non-elderly persons from employer-based coverage to uninsurance and increased enrollment in public programs. However, the outcomes have been different for adults than for children, mainly because children have been the main beneficiaries of new public health programs and increased public coverage. Meanwhile, the majority of adults who have lost employer based health coverage have become uninsured.

Considering adults in California, and taking into account projected population growth, the report forecasts that 80,000 fewer of them will have employer-based health coverage by 2010, 1.16 million less than would be the case were coverage rates to remain stable. Meanwhile, 1.23 million more will be uninsured, 400,000 will be enrolled in a public program and 310,000 will purchase private coverage.

Along the same lines, but considering adults and children together, the study predicts that 170,000 fewer Californians will have employer-based health coverage in 2010, 1.9 million less than would be the case if the coverage rate were to remain stable. In 2010, there will be 1.5 million more uninsured Californians than in 2004 and 880,000 more will be enrolled in a public program. For Californians in the bottom half of the income scale, only 29% will have job-based coverage, 36% will be uninsured, and 28% will have public coverage.

For every 10% rise in heath premiums, 1.3 million fewer Americans are covered by employer-sponsored health insurance, producing an increase in uninsurance among adults and a rise in public coverage among children. Our simulations predict that by 2010 only a bare majority of individuals under 65 years of age in California will be insured through an employer if premiums continue to rise near current levels.